Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

ABB To Gain From Solid Demand In Markets, Risks Persist

Published 11/18/2019, 09:44 PM
Updated 07/09/2023, 06:31 AM

On Nov 18, we issued an updated research report on ABB Ltd (NYSE:ABB) .

In the past month, this Zacks Rank #3 (Hold) stock has returned 12.8% compared with the industry’s growth of 8.5%.

Existing Scenario

ABB believes that its strengthening business in the United States, coupled with stable orders across businesses in Asia, Middle East and Africa region including India, Japan, Singapore and the UAE will boost competency. Of late, the company has been experiencing solid demand for smart buildings offerings and solutions. Also, healthy demand for smart buildings solutions, strength in data center market and robust orders in motor industry are likely to benefit the company.

ABB has been steadily strengthening business through acquisitions. In this regard, the company’s buyouts of Intrion (September 2018) and GE Industrial Solutions (June 2018) have been adding value to its business. In addition, strategic corporate collaboration deals with renowned companies are expected to be beneficial.

Moreover, stronger productivity and diligent cost-cutting initiatives are likely to improve the company’s operational efficacy over time.

However, rising cost of sales has been a major concern for the company. The metric rose 2.9% in first nine months of 2019 year over year. Also, ABB incurred costs of $79 million, primarily on account of employee severance costs, in the same time frame. Escalation in costs and operating expenses, if not controlled, can severely impact margins and profitability.

Stocks to Consider

Some better-ranked stocks from the Zacks Industrial Products sector are Albany International Corporation (NYSE:AIN) , AZZ Inc. (NYSE:AZZ) and Energous Corporation (NASDAQ:WATT) . All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Albany International pulled off average positive earnings surprise of 21.27% in the trailing four quarters.

AZZ delivered average earnings surprise of 2.12% in the trailing four quarters.

Energous delivered average earnings surprise of 6.67% in the trailing four quarters.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft (NASDAQ:MSFT) in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>

AZZ Inc. (AZZ): Free Stock Analysis Report

ABB Ltd (ABB): Free Stock Analysis Report

Energous Corporation (WATT): Free Stock Analysis Report

Albany International Corporation (AIN): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.